We see those as all competitive advantages in the pet space, and we continue to take market share there. And we believe we have substantial market share opportunities ahead, both in 2024 and beyond with our existing customer base, as well as the new customers that are out there. So companion animal in general for us, it remains a healthy business, and it’s something that we were confident in taking share in the years to come.
Operator: Thank you. The next question comes from the line of Peter Keith with Piper Sandler. Your line is now open.
Peter Keith: Hey, thanks. Good morning, everyone. Just to touch base on deflation, Kurt, you said modest deflation. I’m wondering if you could actually just quantify that if we think if it’s like down 1% as comp headwind, and then bigger picture, there are some concerns that deflation will take you guys back to the back half of like 2015 to 2017 where comps were sluggish for a longer period of time. Do you see any key differences from the economic backdrop today versus several years ago when we last saw deflation?
Kurt Barton: Yeah. Peter, I’ll start with your first part of your question in regards to what our assumption is on a neutral deflation. Roughly neutral deflation for the year overall is what we see, give or take, I mean, give or take in our ranges, plus or minus one impact on retail AURs. As Hal mentioned, I think, in one of the other questions earlier, as we’ve rolled back off the peaks of 2022 throughout 2023 on a lot of the commodity deflation. A vast majority of that occurred throughout 2023 during these cycles. And these are fast turning SKUs in feed and food. So these — these prices are already in our retail prices. First half of the year may have some exposure as a year-over-year lap on that. As we had slight net deflation in Q4, there could be and assumed in our guidance, some slight in the first half of the year.
The second half of the year could be neutral or actually slightly positive. So we’ve considered each of those scenarios, but we really don’t see a wide range in there. And I demonstrated that in regards to like corn, where it’s 35% below the highs of 2022, and that happened throughout 2023. There’s 10 or 15 points of difference between the pre-pandemic levels. And so there’s really not much movement left in a commodity, and that commodity is a small percent ingredient in a small or a portion of our products that we offer. In comparison to 2015, it’s all about what’s structural. In 2015, we were coming off of years where oil prices, steel prices, grains were coming off of highs, and they completely flipped. In this case, the commodities hit the early peaks in 2021 and 2022 and all the structural nature, which is a bigger portion, such as wage rates, operating cost, et cetera, are really begin to get embedded in 2022 and 2023.
And this structural. So I think it’s a very different scenario. And there’s limited risk that we see, if anything, it’s a small level, and we believe adequately considered in our guidance.
Operator: Thank you. The next question comes from the line of Joe Feldman with Telsey Advisor Group. Your line is now open.
Joe Feldman: Hey, guys. Thanks for taking the question. I wanted to follow-up on something you said about big ticket. And you talked about you think big ticket should be positive in 2024. I was just curious, is that lapping in just the easier comparisons? Or is it more to do with your view that discretionary spending will pick up, consumer behavior will kind of shift towards that discretion bigger ticket category. Like what’s driving, I guess, that confidence in having said that. Thanks.
Kurt Barton: Joe, this is Kurt. I’ll quickly just affirm what our — was assumed in our guidance and then let Seth give you the answer about why we’re assuming that for 2024. But we do believe that big ticket should be in line with our overall guidance range for the year. That’s as you see that, that’s relatively flattish at the midpoint to slightly favorable. And we’re going up against two consecutive years of negative big ticket comps. So it has a lot to do about the compares. And in 2022, we were coming off of all of the stimulus spending in 2023. There’s a bit of a swing off of durable goods into services and some of the weather-related pressures. And in 2024, we’re cycling that and we’ve got some great offers, some new innovations that I know Seth can speak to.
Seth Estep: Yeah. Thanks, Kurt. Yeah, so as Hal mentioned in his prepared remarks, we’ve got a lot of newness and innovation coming, particularly in our big ticket categories, also as we lap some of the easier compares that Kurt just mentioned, whether it be the Toro havoc that’s going to be exclusive to us that Hal mentioned, a whole new grill lineup that we continue to expand basically an exclusive lineup of trailers to Tractor Supply, where we are definitely a destination, safe. As we look ahead, we believe can be a driver for us and then finally, I’d just say as the team and as we mentioned in prepared remarks, our private label credit card that we’ve been able to lean into to drive some volume as it comes to big ticket has also been strong.
Hal Lawton: Broad-based, I’d just say, retail, in general, is rebounding some of the big ticket, and we could definitely see that as we approach kind of November and December.
Mary Winn Pilkington: Allisa, we’ll take one more question. Time limit.
Operator: Certainly. Our final question comes from the line of Michael Baker with D.A. Davidson. Your line is now open.
Michael Baker: Okay. Thanks. Can you guys hear me?
